When it comes to mortgages and long term property lending, this is one of the areas we’re most experienced in, and one of the areas we find that we’re able to make the most difference with our clients.
In business, and certainly in property, being able to arrange reliable, affordable and manageable long term finance is absolutely crucial, and nothing can get in the way of that quite like an adverse credit history.
What we like to do with our clients, and our panel of lenders, is take a look at the whole story and build a picture of where our clients are at financially and find alternative ways to prove their credit worthiness and risk profile.
Here we’ve put together a handy guide for you, so that we can talk you through the process of a bad credit commercial mortgage.
How can I get a commercial mortgage with bad credit?
Ultimately, mortgage providers, and certainly more traditional lenders, would prefer to provide credit to applicants who have a good credit history. This shows them that they have a good history of making repayments on time, stick to the terms of the agreements they make, and can afford to pay their loan off completely.
For more traditional lenders, a history of missed payments, defaults, or adverse events, can indicate a higher risk that you won’t repay your loan or mortgage. Bad credit doesn’t necessarily indicate that you won’t repay the loan, however, different lenders have a different risk profile. Some are happy to fund riskier loans or mortgage, and some would prefer to deal with less risky applicants.
What we can do, however, is help you apply to a panel of lenders that are much more niche and are happier to take on a higher risk profile, whilst helping you show these lenders that you’re less risky in other ways. For example, if you have other types of repayments you can show, or a stable income you can prove, or if you can provide security against your mortgages.
We can work with you, and our lenders, to help you both feel confident with each other and come to the right arrangement.
Table of Contents
• Book an appointment
• How can I get a commercial mortgage with bad credit
• What you need to consider before moving forward
• Types of bad credit we can help with
• Commercial mortgage calculator
• Can my business get a commercial mortgage with bad credit history
What does it mean to have bad credit?
In simple terms, your credit history shows lenders what your borrowing history looks like.
It is made of a number of different things but will largely show new creditors how you’ve managed your borrowing in the past. If you’ve borrowed money for mortgages, credit cards, loans, commercial mortgages, or even a phone contract, then your repayment history will show in your credit report.
There are three main agencies who hold this information, and any creditor you borrow money from will report to them each month the balance of your borrowing, whether you pay on time, and whether you’ve defaulted on your debt.Bad credit can mean different things to different lenders, and each have their own criteria of what they think is good and bad. Generally speaking, however, you’d be considered to have bad credit, or be riskier, if you have a history of missed payments, defaults, or county court judgements.
Why banks do not lend to people with bad credit?
As we mentioned earlier, banks prefer to take on as little risk as possible. A credit history illustrates whether you are reliable and have managed your credit well in the past.The worse your credit, or if you have bad credit, the riskier you become for a lender. In the same way that you may consider a client riskier if they have a risk of not adhering to contracts, it’s a similar situation with lenders who provide mortgages.High street banks, owing to their size, tend to take on much less risk because they don’t need to take on risky loans or mortgages. In comparison, smaller and more niche providers of mortgages may consider you, and the other thing to consider is that they’re able to charge higher interest. A bad credit mortgage often means more interest for providers.
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Does this mean I can get a commercial mortgage?
In simple terms, yes. We’ve worked with many clients over the years and have a relationship with many providers of mortgages. Bad credit commercial mortgages can always be arranged if we can help you to meet alternative criteria and show that you’re not too high a risk.
The best advice is to speak to one of our brokers and we can take a look at your situation first.
What you need to consider before moving forward
Before you move forward with an application, here’s a few things to consider:
Do you have a mortgage deposit?
If you have bad credit one thing most providers of mortgages will expect is that you take on some risk yourself by putting forward some of your own money. Ultimately, you’re showing your lender or commercial mortgage provider that you’re confident you’ll repay the loan.
Do you have other mortgage security?
One thing you can do, is if you have other assets you can put forward as security, you’re also showing your commercial mortgage provider that you’re confident in your ability to repay by putting forward an asset they can use if you default. Primarily a property would be the ideal asset, but there are always other things we can consider. If you’re able to put forward a residential property, for example, even with a second charge, we can help even if you have bad credit.
Can you prove your income to lenders?
Another thing that commercial mortgage lenders like to see, even from those with poor credit, is that they can prove a stable income with which they’re able to repay their commercial mortgage. If, for example, you’re looking to purchase a commercial property to expand your business, and you can prove with your accounts that you’ve been making steady income for a good period, this could help you with your commercial mortgage application.
Types of bad credit we can help with
There are a number of issues we can help you with, such as:
Missed payments: If you’ve damaged your credit by missing payments in the past, we can help you to give your commercial mortgage provider with confidence that you can make your payments on time.
Defaults: If you’ve defaulted on debts in the past, there could be many reasons for this, and doesn’t necessarily mean that you’re not now in a position to take out a commercial mortgage.
CCJ’s: A county court judgement can sometimes be one of the worst adverse events you can have on your credit, and can badly affect your ability to qualify for mortgages, but if a certain amount of time has passed, we can still help.
No credit history: Funnily enough, having little or no credit can be as bad as having adverse credit or bad credit. It means that providers of mortgages and other credit don’t know what your history is like, but again we can help with this.
Commercial mortgage calculator
For those with bad credit looking for mortgages, or property investors, we’ve included our handy calculator. Even if you’re not sure about your credit, this will allow you to adjust the deposit amount, term of the mortgage, value of the loan, interest, and other criteria so you can get an idea of what you may qualify for if for example, you’re looking to convert a HMO, create an HMO, or fund a refurbishment.
Can My Business Get a Commercial Mortgage with a Bad Credit History?
Yes, with our help, we can certainly get you in a position, even with bad credit, where we can help you arrange a mortgage. For property investors or those looking to renovate property, there are many situations we can help you with, even with a development.
We work with a large panel of lenders and our service will allow you to access providers who are willing to take on extra risk with properties.
Speak to our expert brokers today
If you’re looking at a development, or other types of property, and need a mortgage, then get in touch and speak to one of our team today to discuss your situation.
If you’ve got bad or adverse credit, we can help you out and find you the right solution for you. We’ve got years of experience and a panel of lenders willing to help.
We’re here every step of the way too, and our brokers can talk you through the process and what you may need. And don’t forget, if a mortgage or a commercial mortgage isn’t for you, we have other options that may work for you instead.